Originally Posted by
Airsupport
no i agree. I never said pinnacle was safe from the chopping block. But I can say that them sourcing it out is cheaper than doing the flying themselves. If not they (all airlines) would have stopped years ago and brought everything in house to save money. They haven't and they dont want to. They sold ASA and still gave them a contract to fly because it was cheaper if Skywest took the company and they just paid skywest some money and let them handle running the airline. Comair has had a for sale sign in their front yard for a long time. Remeber Pinnacle was wholly owned by northwest and we were sold off. It cost more to manage, run, and handle the everyday business of an airline than it is to just pay a contract fee and handle it themselves.
How many other major airlines own their own regionals? Is Delta the only one? There is a reason for that.
Doesn't American essentially own Eagle? How about Horizon and Alaska?
I have a hard time believing that the extra costs involved in being able to whipsaw labor outweighs the savings of combining 9 companies into one. Delta is an airline, they are in the business of flying airplanes. At what point does Delta just become a shell of a company with no real employees? Although the contract carriers overhead costs are not directly paid by Delta, the money still needs to come from somewhere to pay for the management team, the buldings, the HR people and all other costs. You don't think it would be cheaper to have one management team and one building to pay rent on verses 9? Delta doesn't want to keep the profits from their own flying? I'm sure it is already a nightmare managing all these airlines that they don't own and trying to bring one level of service. Think of the resources Delta needs now to manage all these regional operations that they don't own and collect no profit from and have no flexibility. If airlines are all about cost cutting there has to be some huge costs to cut here. One wholly owned and one contract, that is all it takes to keep labor in line.